#game development
The gaming industry for investors: what do you need to know?
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The gaming industry for investors: what do you need to know?

When it comes to games, many people think of gamers with joysticks and beautiful virtual worlds. But behind all this lies one of the most profitable markets, where serious budgets are at stake and decisions are made based on business logic rather than emotions.

The gaming industry for investors: what do you need to know?

For investors, a game is not just about the plot and graphics. It is a product with an economy, an audience, and a lifespan. You can make money here, but only if you look deeper: who is releasing the project, what is its revenue model, and does the team know how to work with the market?

At KISS Software, led by Yevhen Kasyanenko, we view the industry precisely in this way—as a market for business assets, not entertainment. In this article, we will show you which strategies and areas make investing in games interesting, and what risks you should keep in mind before entering this field.

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Why you should invest in the gaming industry

The gaming industry is not standing still: new formats, revenue models, and entire niches are emerging that simply did not exist a couple of years ago. For investors, this means one thing: there is room to grow here. But to understand why the market is so attractive to capital, it is important to look at two things: how fast it is growing and what makes investing in games particularly valuable.

Industry growth and investment prospects

According to Newzoo, its volume exceeded $180 billion in 2023. PwC analysts believe that by 2032 it could reach $600 billion—and this is not a fantasy, but a calculation based on current growth rates and audience expansion.

What is driving the market forward:

  • Mobile games. The convenience of smartphones makes this segment the most profitable: more than half of all revenue already comes from mobile gaming.
  • Cloud technologies. Now you can play without an expensive PC or console — all you need is the internet. This opens up access to millions of new users.
  • VR and metaverses. Still a niche, but giants such as Meta and Sony are actively investing in this area, paving the way for the future.

 

For investors, it is not only growth itself that matters, but also its structure. Some segments have already proven their stability, while others are just starting out and could yield multiple returns. It is the combination of these factors that makes the gaming industry so attractive.

What factors make investing in games profitable

It is not only audience growth that speaks in favor of the industry. There are several other features that increase the value of investments:

  • the market is global and not limited by geography;
  • digital distribution reduces costs and speeds up the release of the product to the user;
  • in-game services generate a regular cash flow;
  • the hit effect can change the scale of a company in a matter of months.

“It is the combination of stable demand and potential for rapid growth that makes the gaming industry particularly attractive to investors seeking a balance between reliability and the opportunity for multiple capital gains,” emphasizes Yevhen Kasyanenko.

Ways to invest in games

The gaming industry offers investors several different entry points. Some choose the tried and tested route—shares in large companies and funds. Others look to studios and startups, where they can catch growth at an early stage. And still others bet on esports and platforms, which are rapidly gaining audience and advertising budgets today.

Shares of gaming companies and ETFs

The easiest way to invest in games is through the stock market, and there are several options for doing so:

  • You can buy shares in large publishers such as Nintendo, Ubisoft, or Activision Blizzard—they own global franchises and regularly earn money from new releases and subscriptions.
  • You can also go through ETFs – funds such as ESPO or HERO, which bring together a whole pool of gaming companies. In this case, you don’t have to guess who will “take off”; the risks are distributed automatically.

Both paths are suitable for investors who want to enter the video game industry with minimal effort: stocks focus on a specific player, while ETFs offer broader coverage and diversification.

Direct investment in developers

This path is more suitable for those who are willing to take risks for high growth. Here, investments go directly to game studios or startups. The potential is huge: one successful project can pay off the investment many times over. But the risks are also higher — the game may not “take off,” and the team may not be able to cope with the task.

There are two main approaches:

  • Betting on studios with projects. Large companies such as Tencent or Microsoft buy shares in developers who have already proven themselves. This is a more predictable option: the studio has an audience and a product, and the investment goes towards scaling.
  • Supporting teams at the start. Here, the idea and the people behind it are what matter. Venture capital funds often get involved at an early stage, helping the project reach release. The potential is huge: a small startup can grow into a market leader. But without careful scrutiny of the team and business model, the risk of losing your investment is very high.

This approach requires involvement and analysis, but it is precisely what gives you the opportunity to be part of a future hit before players around the world know about it.

Esports and gaming platforms

Esports has gone from local clubs to arenas with thousands of spectators and broadcasts to millions of people around the world. Here, investors have several areas to focus on:

  • Teams and leagues. Well-known organizations such as Cloud9, Team Liquid, and FaZe Clan operate on the classic sports model: revenue comes from sponsors, advertising, and merchandise.
  • Streaming platforms. Twitch and YouTube Gaming have long been ecosystems for millions of viewers. Money here revolves around subscriptions, advertising, and donations.
  • Games with a developed scene. League of Legends, Dota 2, and CS2 have long since become esports disciplines with championships and multi-million dollar prize pools.

 

The gaming industry is growing and changing, opening up more and more ways for investors to earn money and achieve long-term capital growth.

What are the risks of investing in games?

“Yes, games promise significant growth, but there are also plenty of risks. The market is unpredictable, and it is important for investors to keep this in mind when evaluating projects,” warns our expert.

It is important to keep in mind some of the most important risk factors, which we will discuss below.

High competition and dependence on hits

The main feature of the market is that it thrives on hits. If a game becomes a trend, the company receives billions in revenue. If it doesn’t, the budgets are wasted. The problem is that it is almost impossible to predict success in advance.

Several points should be taken into account here:

  • the market is oversaturated, there are too many new releases;
  • the development and marketing of major games cost tens and hundreds of millions of dollars;
  • even a successful project quickly loses its audience without regular updates.

Therefore, it is important for investors to evaluate not only the video game itself, but also the studio’s strategy: how it works with the community, whether it can retain players, and whether it has a reserve of ideas for the future.

Regulatory risks and changes in monetization

The second problem is rules that change on the fly. And the larger the industry, the more attention it receives from the government.

  • Loot boxes and microtransactions. In a number of countries, they are already banned or severely restricted. Studios have to urgently rebuild their revenue models.
  • Antitrust cases. Microsoft, Sony, Epic Games—all have faced investigations, and such stories instantly affect stock prices.
  • Advertising in games. Especially in mobile games. New restrictions could hit free-to-play projects hard.

The gaming market can make money quickly, but it can also run into problems just as quickly. A savvy investor must keep in mind not only the revenue figures, but also all these pitfalls.

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How to choose a company or project to invest in

In gaming, as in any business, it’s easy to get caught up in the hype. Loud announcements, beautiful trailers, promises of a “new era of gaming” — it all sounds tempting, but for an investor, other things are important: the numbers, the strategy, and the people behind the project. They are the ones who determine whether the company will grow or burn out at the start.

What to look for when choosing a company

There are several things that cannot be overlooked:

  • Financial health. Stable income, clear reporting, and an adequate level of debt — without these, any success is temporary.
  • Hits in the portfolio. Franchises such as EA’s FIFA or Activision’s Call of Duty drive business for years, reducing dependence on random luck.
  • Innovation. VR, cloud gaming, AI, metaverses—those who are the first to try new technologies have a better chance of growing.
  • Team. Experienced developers and managers are more important than pretty promises. If people know how to feel the market, it’s easier for the project to survive.
  • Scalability. The wider the reach (PC, consoles, mobile), the more resilient the company is to market fluctuations.

 

Which companies and funds seem promising

It all depends on what you are looking for: calm stability or the opportunity to catch a sharp rise.

  • Major publishers. EA, Tencent, Sony, Take-Two – these are all about reliability and proven models.
  • Technology companies. Nvidia, AMD, Unity, Epic Games – driving the industry forward with engines, hardware, and cloud solutions.
  • Young studios. Embracer Group, Cloud Imperium Games, Niantic – there are more risks, but the potential for growth is also much higher.
  • Funds (ETFs). ESPO and HERO allow you to enter the industry directly through dozens of companies and smooth out possible downturns.

The main thing is not to look only at the nice numbers in the reports. It is important to understand how the company sees the future and how ready it is to adapt to it. Because in the gaming industry, it is not those who shout the loudest about “revolution” who win, but those who know how to work for the long term.

How to start investing in games

Now that you know the ways to invest in the industry and understand its prospects and risks, it’s time to move on to practice. To avoid getting distracted, it’s best to start with two basic things: choosing a broker through which you can enter the market and a clear plan of action so that the start goes smoothly.

Choosing an investment platform and broker

An investor cannot do without a broker—it is through them that stocks and funds are purchased. There are many options, but the main players are well known:

  • Interactive Brokers—a giant with access to virtually all global markets. Suitable for those who want the maximum choice of instruments.
  • TD Ameritrade is an American platform with a user-friendly interface and a good base of training materials, which is especially valuable for beginners.
  • Freedom Finance is a European broker that provides access not only to stocks but also to IPOs, including gaming companies.

 

When comparing brokers, don’t just look at the brand name. Commissions, interface convenience, the set of available tools, and how support works are important. These “details” ultimately determine how comfortable your entry into the market will be,” advises Yevhen Kasyanenko.

Step-by-step plan for investors

Once you have decided on a broker, follow these steps:

  1. Determine your budget and risk level. Decide how much you are willing to invest and how much of your funds you are comfortable keeping in risky assets.
  2. Choose a strategy. This could be shares in major publishers, investments in studios, or diversification through funds (ETFs).
  3. Open an account and fund it. After registering with a broker, choose assets that fit your strategy.
  4. Follow the market. Company reports, game releases, and industry news directly affect the value of securities—they cannot be ignored.

This approach allows you to enter the industry without unnecessary fuss: you understand where you are going, why, and on what terms.

Conclusion: why investing in games is profitable

Today’s gaming industry is not just about entertainment, but about a real market where billions are at stake and new growth points are emerging. There is room here for both cautious investments through the shares of major publishers and bolder steps, such as investments in studios or esports.

We at KISS Software, led by Yevhen Kasyanenko, view games as full-fledged business assets. To get the most out of them, it is important not to succumb to hype, but to understand the numbers, assess the risks, and think several steps ahead. This approach not only protects your capital, but also gives you the chance to grow it along with the market, which continues to expand.

If you want to understand which investment formats are best for you, submit a request for a consultation.

 We will help you understand the details and suggest a strategy that will work for your goals.
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